I've been nerding out on old posts about salespeople on the forum.
I've figured out that these seem to be the most common worries about salespeople:
1) can’t measure/don’t understand building process.
2) Can’t roll with ups and downs of commission based salary—can they wait to get paid when you get paid?
3) outside sales rep means customers aren’t your customers—they go with the rep if the rep goes.
4) Independents come to you with what they want, in house may work with what you have, but be limited with what they think you can do.
Now, what if a person had
a) business/manufacturing/psychology education
b) experience maintaining accounts for a large firm
c) a financial set-up that allows them to wait for you to get paid
d) a desire to work in-house
e) enough woodworking experience to show you how to make anything they sell that you haven't made yet.
f) a home shop for experimental projects.
a) need training. Never priced out a kitchen, have no idea what is worth what.
b) have no solid connections in this industry--I'm a quick study but I don't have years of face time.
So if you, dear owner, would take a person like me in, it would mean some of your time, but at no direct expense. Commision based, but needs training. I eat the training costs, but so do you--in time.
What would you say to that? Any concern you can think of, I want to hear before I bring it out in the real world, and make an arse of myself. Don't be afraid to get harsh/pointed, I want to hear it.
I've tried several sales types over the years. None successfully. So I know the failure modes. 1st was an "experienced" salesman for a similar product line. Could make a "foot in the door" sale by lowering the price, lied a lot, didn't have any idea about the product. #2 skilled woodworker, he underestimated the difficulty of making contact with the actual person responsible for the purchases. #3. Holder of a PHD, some experience in wood. Could not follow instructions, wasted time talking to non-decision makers, total failure. Went back to word of mouth and my own personal contacts. I spend part of my time trying to develop new clients, not easy!
If bubbly extrovert comes off the same as confident and knowledgeable, you have a shot. I present my work once a month in an artist group, open studio night. Of the 12 artists in the group, 2 present a confidence that makes them successful. They sell work in the range of $2500-$6000. The rest of us sell in the range of $100-$1500. I consider myself very fortunate to be invited into the venue, but am in the introvert/uncomfortable artists side of the group. Luckily I'm in the least introverted side of those remaining 10, so sell a few items every month. Some of them sell about 4 times a year or less because they hang around the back of the venue with their friends, afraid to talk about themselves to strangers. I'd suggest that REAL training from a sales professional would be the training you need. Absolutely nothing to do with woodworking is the key here. Not another woodworking shop owner who has lived on his reputation more than his sales abilities for your training/opportunity.
I'm starting to get the impression that there isn't a ton of shops with a very strong in house sales person. Which I've often noticed that the former shop where I was, despite their severe disorganization and chronic lateness, still always has tons of work.
13 shop employees, full time trucker, constant overtime. They have an inhouse sales guy that does just that and is apparently pretty good at it. Guy use to be an installer.
I can for sure be that person. And I'm too stupid to leave the industry. Happen to love it. Most especially all those flannel wearing introverts who just want to build cool things all day :) unless it's live events, the world outside of woodworking is pretty boring to me.
I actually think there could be a bit of a niche there... digging :)
As to what makes a good salesperson, here's my take.
We have tried several outside salespeople. Only one was successful. Most of them did not really understand the product, and therefore could not tell people why they should buy ours instead of the other guys. The successful one spent the time to learn the product. Of course, he was also personable, articulate, stayed on top of things and never oversold.
The successful one was an anomaly for us. We've have probably 10 outside salespeople over the years (roughly 30), and we finally decided that outside salespeople just don't do it for us. I blame myself for not being able to properly train and control them, but it's a limitation I had to learn and decide how to deal with.
We currently have our first inside salesperson (other than myself), and it's been quite a success after 5 years. There are several attributes that I contribute to his success in selling flooring for us.
1. He owned his own business for 30 years, so he knows the reality of needing to make sales to meet expenses. He also realizes he can't give away the farm today if he wants to have a job tomorrow.
2. In that business he acted primarily as a general contractor. This gave him the personal experience of installing floors in various conditions, as well as dealing with subs, job site irregularities, dealing with homeowners, etc. He is able to help our customers through the process because he understands the process.
3. He loves people. And he loves to talk. It took me a while (actually, I still struggle with it) to get used to how much time he spends talking with people. But that's how he builds relationships - getting to know what people want, what they like, what they need. Getting to know him gives people reason to put confidence in him. We are not the most expensive place on the block, but some people spend up to $100k on a floor, and they have to trust you to do that.
In my mind, sales is very simple, but not easy. I like to equate it to walking across the USA (or Canada...). It's very simple - get a map and plan a route with no limited access highways. But getting out and doing it is another thing.
At its most basic, sales is connecting a person with a product. To be successful you need to understand the person's desire (whether it's a need or a want doesn't matter), and figure out how to provide it. Just be prepared to understand that sometimes you can and sometimes you can't, no matter how hard you push. Push too hard and you will not only lose that sale, but you may potentially lose the sale that might have come later, as well as all the potential sales that the non-buyer may have promoted you for.
I see sales people more in the commercial arena than residential but they exist in residential as well.
The big question in my mind is lead generation. If you have a great salesman but no leads what is the point.
The successful residential sales companies do a LOT of advertising and they charge more to cover the advertising costs. The estimating is reduced to an irreducible simplicity and the salesman can focus on sales.
Another method of creating leads is through networking.
Commercial is a different animal but lead generation is still an issue which usually gets assigned to the salesman in commercial. I have tried a half dozen salesman over the years. What worked best for me was using telemarketers to find the "decision maker", which is harder than you might think. Then I would bid and close the job. The advantage of commercial is that you are selling to repeat customers.
Where I have seen people be successful in sales in woodworking is:
Commercial work TI type work. Offices, healthcare, retail stores.
Trade Show exhibits, I have no idea how they generate the leads for this, but I have heard it is lucrative for the salesman and shop. And extremely stressful.
Residential where the shop does a lot of advertising.
Commercial lumber yards.
A fallacy is that consumer spending is 70% of the economy. The truth is that it is less than 50% of the economy because the GDP doesn't even count the capital goods that goes into making the consumer goods. So it is a much bigger market than the consumer market.
The other advantage is that you have repeat customers.
The keys to sales are as Dave said figuring out what the customer wants, which is not obvious. E.G. if the purchasing agents give you a contract are you going to make him look good or bad.
They always use emotional reasoning in making their decision, more so with residential but with commercial as well. E.G. trust is the key one but also greed comes into play as with trade show exhibits. Also a funny thing happens with trade show exhibits in that the owners of the company have a lot vanity regarding the booth so they will actually gladly spend more money to have a bigger or more grandiose exhibit, as they would with a car.
As with many things sales boils down to control. If you cannot control people you will have a rough time in sales, if you can you will do well.
Another tool is good manners, not the please and thank yous, but treating people with respect or importance. IOW if you are flippant (which is common with millennials) you are going to be shown the door. This also applies to people you have no idea are important. I.E. the secretary or project manager as often as not these are the people who are the decision makers. Think about it, the customer has accomplished a lot, yet rarely gets acknowledged for his accomplishments, respect that (no phony bullshit either) and it will pay.
Also you might want to learn public speaking it helps, because you will want to talk to different organizations.
Dave--I have been harvesting knowledge from my most favorite accomplished salesman. He says the same, that the power is in your capacity to ask questions and listen. And if you do that well enough, there is no need for a big hype around "closing"--your proposal suits them so well at that point that it's a two way conversation with a common goal.
Pat--if trade shows are good for residential boy am I ever in luck. I've set up my share of them and not only know every in and out of every one of those venues, I can also get the set up at cost, heck even design it and set it up myself.
And yep--I can talk to strangers all day surrounded by madness and noise :)
So folks--I need the hive mind on this one. ...
Had a thought. So from what I'm seeing in our area custom shops deal with middle men between them and the end user. Designers, general contractors, etc.
But places like Home Depot and Ikea have a chunk of the market--some end users like to walk in and make their own choices.
Now is there a disconnect between custom shops and end users? Can't help but wonder... I see that the old shop had variations, but day to day boils down to a whole lot of repeat. About 8 types of crown, 2 types of risers, 8 types of doors, boxes dictated by materiel choice, and a handful of mantles/hoodboxes. Finishes are plentiful but about the same 6 get used over and over again. With pretty much two types of window valances, couple odds and ends...
Now would it be that difficult for an end user to make those choices themselves with an in house person? A step between the Ikea model and the designer model?
Anyone do this sort of end user sales on a more custom level? Honest base inquiring question--I have no preconceived notions about this (yet lol).
Many threads in these forums discuss shops that need more work. Shops closing due to lack of work. Payroll consuming all profits because not enough work.
Those all sound like companies that could use a good salesperson.
Sales is a trade & talent unlike any other. Some people have the gift, others don't. If you have what it takes to make sales AND you have great woodworking knowledge, then maybe this is something you could do.
I've had various people try to sell for me. The most successful ones acted as resellers. They close deal with a client they find, purchase product and/or installation from me and resell it at whatever marked up price they could negotiate.
Other people have just found promising leads for my niche products and referred final sales to me, and I pay them a commission.
Many shops that are struggling now (or want to expand) could be completely turned around by a successful salesperson who can find & close deals.
Sales is a huge PIA for lots of woodworker background owners. Lots do it themselves and struggle. And a small/medium sized shop won't immediately attract Slickity Rick the super experienced salesman.
But everyone seems to be screaming "show me numbers, bring me clientele off the bat". Which is fine--if you have salespeople lining up at your door or are doing superfine yourself.
So no walking in with clientele? Sure, no base salary + commission. But if a person offers a commission only basis for inhouse, should that not be pretty attractive?
I get the impression that the "sales is impossible" thing comes from people who are struggling with it. Lets keep in mind that some folks make a pretty good living off sales... and find things like woodworking pretty hard.
Array of skills out there, no? Match making has got to be where it's at.
Hitting up a large firm tomorrow... haven't polished the very fancy shoes in a while lol. Kinda half into it--always liked smaller organizations. Less synthetic.
Ok, so I didn't read the entire thread, but why not develop Mel's Custom Cabinets, make a deal with 2 or 3 or 4 decent shops, and live off the spread between what you can buy a kitchen for and what you can sell it for.
Using 3 or 4 shops means no one controls you.
As you build your "brand" you can start to build your own small stuff, wall units, closets etc. and slowly work into your own shop as demand and capital allows.
If you were in Ontario, I'd love to help you out with this - I have a number of clients in the same situation.
There is something to that idea. There's another thread going on a start up and lots here seem to be saying the same thing-- that learning both sales and running production at the same time is a little hardcore. To start with sales first. Later think making if you still want to at that point...
per Dropout's suggestion of 'branding' herself selling from multiple shop that do the actual production... this is what my top salesman does. he focuses on the niche product that I build. He has his own website, and sells products from multiple shops, since each shop has their own unique style. He just talks to the clients, closes deals, and buys/resells from whichever shop best fits that particular order.
If I was starting from scratch again, I would be tempted to do what he does -- the only tools he uses are his cell phone and laptop. My shop and the other shops he buys from are the companies that have to deal with equipment, employees, production, etc. He just sells and adds his markup. Sweet deal for everybody - the shops get steady orders from him and he has a wide variety of product to offer his clients.
Kay so this is the part where I probably show my age... But I need someone to explain it to me like I was stupid.
So how exactly does one presents themselves when they do that? What exactly does the website say? Or your business card for that matter? Are you saying that you are a shop but then you sub it out? Is the work like it was your own? Or do you present yourself as some sort if coordinator?
Ive tried subtly digging but I think it's time to bluntly ask someone to spell it out for me lol
There's really unlimited ways to approach it, Mel.
In the example with my main reseller, he doesn't necessarily present it as his own work, but doesn't elaborate that it comes from other sources either.
Say for a fictional example the niche is Lamps. He set up a website called Larry's Lamps. The website has a variety of lamps for sale, and galleries of prior custom lamps created. There are different types of lamps, coming from different vendors, but he is presenting it all as a single source for a variety of lamps.
I have other resellers who are pretty much my direct competition. I don't always trust them lol, but if they send me money I send them the product. Simple.
But you could also present yourself as a coordinator, designer, decorator, contractor, etc. Really gets down to what you are most comfortable doing and what brings you the best results.
I haven't read all your messages on the forums to fully understand your situation, so I apologize I can't tailor my suggestions closer to what you do, however I have read enough to sense that you are highly motivated and ambitious to bring yourself to a new level. That ambition is the most important element really -- if you keep pushing for a successful route you'll find one. Maybe it means finding 99 unsuccessful ones first, but I get the feeling you are GOING GREAT PLACES !!!
We don't have a sales "force." Most of what we make is sold by: A man that has a web site that presents everything as if made in his shop. He is incapable of design so only sells to places that have their own designers. Man 2 has a very slick web site that says they do it all, including design. "They" is a one man band operating out of his house. He draws in Sketch up and e-mails us his drawings.
Client #3 is a large corporation that has a design team. They tell their clients that we are the ones that will make the product. Other work is parts for other shops that don't have the technology to manufacture it. We also sell to general contractors for commercial work, to lumberyards for moldings and to a couple of small operations that sell closet systems and install them. "ANYTHING" for a buck, sort of! We don't do residential work for individuals!
So you could go many different ways as a seller. I don't like the idea of claiming to be the manufacturer but the two guys, that sell that way for us, claim it helps them sell because the client thinks they are avoiding a sellers markup.
For me it has worked for 25+ years to not have a sales department. When I did try it it was a failure. The cost is there either way.
So to be blunt again... If I want to skip the newbie sh!t and go straight for the decision maker--who am I hunting down? General contractors? I need the job title of the person that will bring me the most consistent business. Does a general contractor override a designer if they have a shop preference for the woodworking?
The rest is Mel on a mission... And boy do I really love missions :)
thanks folks for getting into the nitty gritty with me--- the answer to this question would only be delayed by PC fishing I think.
Wait a second here--are all you shop owners reading this?
This is what outside sales looks like.... Would you really reject an inside sales prospect at straight commission if this is your alternative? A mark-up king? Maybe I missed something??
I'm no shop owner, but this got my noggin going on this fine evening! Of course in the prospect of self interest, mark-up queen looks darn good, but if I think on the other side of the coin... kinda wondering?
She needs to find someone who is open to ideas. I would never ever ever hire a salesperson. Would never even consider it.
But if someone came to me with ideas like Mel, I'd listen.
While the idea of a commission only salesperson is great, and if Mel were in my neck of the woods, I'd try to make a deal, there are two sides to everything.
She needs to worry about protecting her ass(ets). If I have work from an existing client and from Mel, and I need to pay Mel commission and don't on the other work, and I only have so much time, where does that leave Mel? What if she brings a job that I can't or don't want to do?
I did find such a fellow that is listening to the concept! Not sealed deal, but we are talking. He originally said no, but we got along and talked. He suggested outside sales, so I mentionned what outside sales looks like.
I think I got his attention :)
Pat... Do you need a hug? just poking at you--I have actually listened and looked at firms that do already have that sales model in place. And I have sent in a resume to one with a posting yesterday-- we'll see.
But I have my reservations-- purely out of personal preference. These places are larger firms, and tbh, I vastly prefer small to medium businesses. I am aware that it means way more effort and more time to see cash, and I'm totally okay with that.
But of course, I am keeping an open mind. And paying probably more attention then you think :)
Here is the deal, a companies grows to the degree it organizes. I.E. a one man shop has organized to that level, it takes a LOT of work to organize to a larger volume.
The types of shops I listed have organized to a level that requires sales people, the smaller shops have not.
At a larger business one person is in charge of a much smaller scope of hats, consequently those workers become very good at the task that is their hat/job. I used to think that was the only way to train someone is trough practice/repetition.
I used to work in tract housing doing installations we were expected to install 2 large houses a day or 4 apartments a day, sometimes all were perfectly scribed to the walls. Not bragging that is just what could be done with that much practice, and we worked 4-6 hour days. Many will say yea but the work was crap, which is not true. I remember we had a bunch on wine racks to build for Whole Foods with over 10 sheets of material in each one. The job ended up using around 500 gallons of paint. I brought in a temp who knew nothing about painting, by the end of the job the this guy was a maestro.
So you in effect are going to try to convince an owner that he needs to reorganize his entire business to accommodate your increased sales. Good luck with that.
I know there are politics involved with a larger shop but that is where more money is. Smaller shops have shown what they want to do by what they are doing. It takes finance, and a willingness to deal with the employee problems, the fact that as you get bigger you are on the radar screen of the agencies who frown upon success, a higher break even point, etc.
AND I would say that the larger shops will give you more clout and have a proven way to generate leads. As a salesman your contacts are your "equity", so if they fire you, you still have your equity.
When a reporter asked the famous bank robber Willie Sutton why he robbed banks he said "Because that's where the money is!"
Maybe you should go to where the money is. The only reason any of us have some cabinets to build is that somewhere someone needs a set of cabinets. Why don't you represent the homeowner rather than the cabinet shops?
There are a lot of people who would prefer to manage their own project without the usual filters that stand between them and their cabinetmaker. Many of these people are competent in their professional life but no nothing about dealing with the great unwashed. Create a concierge service to help them navigate their way through this minefield. They don't do this often enough to get good at it but they do want to get it right.
Check out a concept (and book) called 'Blue Ocean Strategies'. The book is a bit of a slog but worth the effort. It will help you to learn how to recognize an opportunity.
The big idea here is maybe you'll just come into contact with people who are smart enough and successful enough to hire concierge people. This kind of networking could provide you the chance to make enough money to hire your own concierge.
One of my favorite things about business is that there are basically no rules to how you can approach it. (excluding laws & regulations of course)
There are the traditional business practices that the old breed has been doing forever. Some of these practices will be continue to be viable for near eternity. Other industries will vanish as technology evolves.
Every now and then people come up with new ideas and approaches that essentially create a new way of doing business. New methods of manufacturing. New designs. New forms of advertising. Better customer service. Faster delivery.
A person or company may find a major breakthough or even just a simple improvement.
The improvements can save people time, money while offering new benefits.
Sometimes the improvements are worthless or poorly executed and this new company fizzles out. Lessons learned from those failures often sprout out new ventures.
With the direction of widespread mobile internet, I think there is a lot of opportunity for micro-niche businesses, especially for small or very small businesses.
My shop started about 16 years ago, and I went the 'normal' expansion route getting more employees and equipment. Lots of fun but also hella lot of work keeping that many people employed and the projects to support them. 2 years ago I had major family issues to deal with and basically had to 'reboot' everything. I refined a lot of my methods, narrowed my focus of work, and am now making more money just as myself (with occasional assistance when needed) than I was when having 10 people work in my shop. A lot less drama too -- 10 employees is like having 10 girlfriends, lots of friction. I enjoy being narrowed down to a more efficient market and being hands on again. Lower volume & higher quality.
Now I have a peaceful shop running out of a barn next to my fishing pond & house in rural forest. Super low overhead & super relaxing environment. Work now feels more like making a 'living'.
I am able to do this because multiple sales people approached me, wanting to sell my product. They approached me out of the blue, each in their own way. And each has a different sales structure and marketing approach.
I now actually prefer sales through them instead of direct. While the direct deals are fun to chase, "the thrill of the deal", there is a simplicity in letting my independent sales people deal with the client, avoiding a lot of personal hassle I have to deal with. Usually they just send me a purchase order with a check for deposit.
This type of sales is nice because they only get paid if actual sales are produced. Not a single penny is spent towards sales staff who are not making sales.
All I'm trying to say is an *effective* salesperson can approach as many companies they want to sell in whichever way works for both parties.
What one will count as fact is based on their underlying assumptions on what makes a fact a fact. You can't get much done with people if you don't somewhat share epistemology.
If I think about what mine is--it's all about numbers, science, and basic human respect. Nothing makes me happier then cerebrally driven group efforts.
I've concluded that I need to open my mind to other industries--and firm size. At the end of the day it doesn't matter what I'm doing or even how much I'm making. I just need to work with/for people that share my epistemology.
Have the feeling I'm embarking on the longest work hunt I've ever had. But hey, it's good to shop smart I guess.
Epistemology, and you thought esoteric was a 50 dollar word. I would guess that epistemology is esoteric to most.
You could substitute reality for epistemology.
Reality is what is agreed upon. E.G. mankind is causing global warming because it is agreed that that is the way it is or all that is wrong with the world is big evil business it is agreed to, so it is reality.
If you doubt me just listen to what most people say.
How is this useful? It is easier to talk to people's reality IOW what they agree to. E.G. the point of surveying customers is to find out what their reality is on woodwork.Then promote your business in that direction as Jim does with his blog or any successful companies have to their type of customer. Advertising and sales AKA marketing is infinitely easier if you promote to your customers reality.
LOL shamefully it was the point where I realised that I had been using esoteric wrong for years--I thought it meant hippy dippy spirituality for some unknown reason.
Epistemology (or theory of knowledge) is studied in both philosophy and psychology. Took an amazing contemporary psych course that covered modern beliefs (pseudoscience, conspiracy theories, etc) and cut them down to basics to review them. In other words put science to them.
It was then explained that for example a pseudoscientist and a scientist couldn't just sit down and hash it out and achieve a common conclusion on a matter, because of epistemology.
That would be the same thing as me presenting a manufacturing education based proposal to the old shop--face flop. Math on yearly costs of an under producing employee has no meaning if you keep employees for emotionally based reasons.
But yeah Pat, above and beyond all that epistemology is totally what needs to be kept in mind for sales. I've been digging a whole lot. Meeting with sales people, looking at other shops, and starting to see how things are done for sales.
I'm seeing three big things right now...
1) the 20/5/1 ratio. 20 phone calls yielding 5 appointments yielding 1 sale. Lather, rinse, repeat. Written about, and applied. Talked to a salesperson for an electrical distributor--he calls a bunch of contractors, asks if he can come introduce himself have a brief chat. Typically comes and finds them on site. Gets a few appointments, does the basic meet and greet, seeks a longer meet up to talk about product. Gets a few, gets a few sales. Lots of nos per yesses, but literature indicates that that is entirely normal.
2) End user sales. This would involve the ikea/home depot style hook where an end user can come and you present some basic choices and help them through it. People like that, wondering about bringing that model to a custom shop that is attractive but often unobtainable for Joe Blo.
3) Very popular right now--web-based sales models. As you mention the fellow with the blog--online presence. Not in a cheesy advertising kind of way, but getting people seeking information as traffic to your website. Blog posts answering FAQ, posts about certain builds, etc.
That's all I got so far! Anyone have good sales books to suggest? I'm just probably scratching the surface here.
Pat is quite right about how confidence in the fundamentals tends to define what is legitimate to consider and what is not. Since you only pay attention to the silos of information that are consistent with your fundamentals it is very easy to find corroboration for these fundamentals.
Political dogma, for example, might keep you from seeing a correlation between massive die-off of honey bees and our current drought conditions. A lack of belief in science because you think dinosaurs roamed the world 6000 years ago might make it harder for you to connect global warming with the lack of pollination in our food crops. Unbridled passion for Ayn Rand might cause you to overlook acidification in the ocean or not necessarily connect this measurable event with big evil business.
So as Pat wisely suggested what you want to do is use people's pre-conceived notions like ju-jitsu.
A good book I am reading about human nature right now is 'Mysterious Stranger' by Mark Twain. You might enjoy others of his as well.
Ah but the OP likes discourse! And is very fond of the southern neighbours... (btw Mark Twain was my first anglophone literature read--in my very late teens. Since I've been hooked on American literature, and daydream about touring the south)
Here's my thing about global warming. The same way the planet does stuff independant of humans, and maybe yes we accelerate the madness, but maybe yes it's just an unstoppable force like the ice age.
But that doesn't matter when it comes to dictating practices. For the same reason nobody poops on their living room floor, is the same reason vigilance for tidy practices makes sense.
On what would you expect to get commissions? The work you bring and any repeat work from those or from all the work that goes through the shop (all their current customers?) I know that the latter is what sales types that came here asking about selling for us wanted.
A place across the street manufactures electronic test equipment. We've talked about how he pays sales commissions. A different take but understandable. The problem for a lot of businesses and their sales force is that once the salesman has acquired a good, larger customer he doesn't need to do much selling. Just stay in contact. That posses a risk for the shop owner. It also doesn't grow the business.
His solution: as long as the customer was increasing purchases the salesman got full commission. If after a period of time there weren't increases the commission was reduced incrementally. That forced the salesman to get off his deceased burrow and find new customers. All was stated up front so the salesman knew what he had to do.
Not a perfect solution but answers one of the inherent problems.
I've been through the problem on relying on one main customer. A very bad plan! Small shops tend to end up in that boat more often do to lack of capacity. You finally get a reliable source of work. All is well until something happens to them. Then it is very hard to replace in the time it takes you to go broke. Anyone been there?
The last outside sales team we took on we did a non-typical commission structure. New customers earned them full commission. Existing customers in their territory started out at half commission. If sales for a customer increased more than 25%, their commission would go to the full amount. Further, if sales in their entire territory increased by 100% (doubled) in any one year over the previous year, all customers would earn them the full commission rate.
Unfortunately, after about three years, even though they increased sales in the territory by about 20% since the beginning, that was right on par with the rest of our sales without even being covered by a salesperson. So we dropped them.
"Anyone been there?"
Thankfully, not. I did one time cut off a customer because they were getting too big - around 20% of sales. However, it wasn't that fact alone. It was combined with payment in the 45-60 day range, and I couldn't risk any more receivables. I find that 10% is a good max. We have about half a dozen customers in the 5-12% range and a bunch in the 1-2% range - I actually like those the best: because of their lower volume they pay higher prices, but don't really take much more work to maintain. The big ones demand (passively if not actively) immediate and full attention, and margins are lower. But we need them to maintain volume - they're the ones that pay most of the overhead. Also, the small and medium ones help fill out what would be valleys if all we had was big ones.
That's a good question. My info on sales is based on people who work in electrical. I know that they have to not only maintain relationships, but also put out spec, quotes and POs before handing something over--thus the commission is always the same.
But I'm quickly learning that nothing ever works the same as anywhere else in cabinet land, so happy you asked Larry, very legit.
Our business is mostly repeat. Also, mostly from already established lines or previously spec'd custom stuff. Occasional new stuff.
Getting the first order is the hardest and most important step. Maintaining a repetition is good, but finding ways to increase market share with the customer is the way to growth for us. Then again, we are the sole supplier to only maybe half a dozen places. Most of our customers buy (products we can't or don't want to make) from many other vendors.
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Subject lines may be edited for length and clarity.
"Cross posting" is not permitted. Choose the best forum for your question, and post your question at one forum only.
Messages requesting private responses will be removed - Forums are designed to provide information and assistance for all of our visitors. Private response requests are appropriate at WOODWEB's Exchanges and Job Opportunities and Services.
Messages that accuse businesses or individuals of alleged negative actions or behavior are inappropriate since WOODWEB is unable to verify or substantiate the claims.
Posts with the intent of soliciting answers to surveys are not appropriate. Contact WOODWEB for more information on initiating a survey.
Excessive forum participation by an individual upsets the balance of a healthy forum atmosphere. Individuals who excessively post responses containing marginal content will be considered repeat forum abusers.
Responses that initiate or support inappropriate and off-topic discussion of general politics detract from the professional woodworking focus of WOODWEB, and will be removed.
Participants are encouraged to use their real name when posting. Intentionally using another persons name is prohibited, and posts of this nature will be removed at WOODWEB's discretion.
Carefully review your message before clicking on the "Send Message" button - you will not be able to revise the message once it has been sent.
You will be notified of responses to the message(s) you posted via email. Be sure to enter your email address correctly.
WOODWEB's forums are a highly regarded resource for professional woodworkers. Messages and responses that are crafted in a professional and civil manner strengthen this resource. Messages that do not reflect a professional tone reduce the value of our forums.
Messages are inappropriate when their content: is deemed libelous in nature or is based on rumor, fails to meet basic standards of decorum, contains blatant advertising or inappropriate emphasis on self promotion (return to top).
Libel: Posts which defame an individual or organization, or employ a tone which can be viewed as malicious in nature. Words, pictures, or cartoons which expose a person or organization to public hatred, shame, disgrace, or ridicule, or induce an ill opinion of a person or organization, are libelous.
Improper Decorum: Posts which are profane, inciting, disrespectful or uncivil in tone, or maliciously worded. This also includes the venting of unsubstantiated opinions. Such messages do little to illuminate a given topic, and often have the opposite effect. Constructive criticism is acceptable (return to top).
Advertising: The purpose of WOODWEB Forums is to provide answers, not an advertising venue. Companies participating in a Forum discussion should provide specific answers to posted questions. WOODWEB suggests that businesses include an appropriately crafted signature in order to identify their company. A well meaning post that seems to be on-topic but contains a product reference may do your business more harm than good in the Forum environment. Forum users may perceive your references to specific products as unsolicited advertising (spam) and consciously avoid your web site or services. A well-crafted signature is an appropriate way to advertise your services that will not offend potential customers. Signatures should be limited to 4-6 lines, and may contain information that identifies the type of business you're in, your URL and email address (return to top).
Repeated Forum Abuse:
Forum participants who repeatedly fail to follow WOODWEB's Forum Guidelines may encounter difficulty when attempting to post messages.
There are often situations when the original message asks for opinions: "What is the best widget for my type of shop?". To a certain extent, the person posting the message is responsible for including specific questions within the message. An open ended question (like the one above) invites responses that may read as sales pitches. WOODWEB suggests that companies responding to such a question provide detailed and substantive replies rather than responses that read as a one-sided product promotion. It has been WOODWEB's experience that substantive responses are held in higher regard by our readers (return to top).
The staff of WOODWEB assume no responsibility for the accuracy, content, or outcome of any posting transmitted at WOODWEB's Message Boards. Participants should undertake the use of machinery, materials and methods discussed at WOODWEB's Message Boards after considerate evaluation, and at their own risk. WOODWEB reserves the right to delete any messages it deems inappropriate. (return to top)
Forum Posting Form Guidelines
The name you enter in this field will be the name that appears with your post or response (return to form).
Personal or business website links must point to the author's website. Inappropriate links will be removed without notice, and at WOODWEB's sole discretion. WOODWEB reserves the right to delete any messages with links it deems inappropriate. (return to form)
Your e-mail address will not be publicly viewable. Forum participants will be able to contact you using a contact link (included with your post) that is substituted for your actual address. You must include a valid email address in this field. (return to form)
Subject may be edited for length and clarity. Subject lines should provide an indication of the content of your post. (return to form)
Thread Related Link and Image Guidelines
Thread Related Links posted at WOODWEB's Forums and Exchanges should point to locations that provide supporting information for the topic being discussed in the current message thread. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related Link that directs visitors to an area with inappropriate content will be removed. WOODWEB reserves the right to delete any messages with links or images it deems inappropriate. (return to form)
Thread Related File Uploads
Thread Related Files posted at WOODWEB's Forums and Exchanges should provide supporting information for the topic being discussed in the current message thread. Video Files: acceptable video formats are: .MOV .AVI .WMV .MPEG .MPG .MP4 (Image Upload Tips) If you encounter any difficulty when uploading video files, E-mail WOODWEB for assistance. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related File that contains inappropriate content will be removed, and uploaded files that are not directly related to the message thread will be removed. WOODWEB reserves the right to delete any messages with links, files, or images it deems inappropriate. (return to form)
The editors, writers, and staff at WOODWEB try to promote safe practices.
What is safe for one woodworker under certain conditions may not be safe
for others in different circumstances. Readers should undertake the use
of materials and methods discussed at WOODWEB after considerate evaluation,
and at their own risk.